Akino Zayasu, President of Polestar Communications

Innovation always emerges from the periphery. Okinawa FamilyMart has leveraged a thorough "hyper-local" strategy to overturn the stagnation of the saturated convenience store market and enter a new expansion phase.

In the first quarter 2025 earnings (March-May period) announced by the three major convenience store chains, average daily sales per store ranked as follows: Seven-Eleven at ¥683,000, Lawson at ¥584,000, and FamilyMart at ¥579,000. During the same period, Okinawa FamilyMart's average daily sales reached ¥685,000, surpassing Seven-Eleven's national average for the first time and setting a new record. Okinawa FamilyMart aims to achieve daily sales of ¥700,000 and total revenue of ¥90 billion (an increase of ¥7.4 billion from fiscal 2024) by fiscal 2027.

Seven-Eleven entered Okinawa—its final blank territory—in 2019, opening over 190 stores in just six years and making Okinawa the nation's third most competitive convenience store market. Okinawa FamilyMart, with 337 stores, has faced intense "dominance attacks" with competitors opening directly across, beside, and behind their locations. However, the accumulated advantage of years spent cultivating deep "local expertise" is now showing in their performance.

The combination of "national chain" convenience with "local neighborhood store" intimacy has created a unique evolution. What's distinctive is the presence of "people" who can intuitively navigate Okinawa's horizontal society and diversity strengths while accepting the vertical organizational structure essential for franchise operations. President Goichi Itokazu (66), who has spent 36 years in sales and store development at Okinawa FamilyMart and served as president of FamilyMart USA, shared insights on his "hyper-local strategy" leveraging his unique background.

"The major difference from other convenience stores is that decision-making authority rests with the Okinawa side. Whether something has a lived-in feel becomes crucial when localizing," explains President Itokazu.

"Being able to decide things from a local perspective, having locals hold decision-making and personnel authority—this affects employee morale. I think this is actually quite important."

The "shio onigiri" (salt rice balls) and "fried chicken" available at convenience stores, as well as the increasingly popular "pork and egg rice balls," were all originally developed by Okinawa FamilyMart, became popular products, were adopted by FamilyMart nationwide, and then spread to other chains. The now-commonplace self-service coffee, with dedicated machines placed in the center of the sales floor and rolled out extensively across all stores, was also pioneered by Okinawa FamilyMart.

Currently, over 50% of the prepared foods—bento boxes and side dishes—at Okinawa FamilyMart consist of independently developed products. One unique item is the paper cup-style "Awamori Coffee." Since its 2010 launch, this million-seller has sold over one million units. Inspired by the local custom of mixing awamori (traditional Okinawan distilled spirit)—with black coffee, the product actually draws from a rather niche practice: "it's commonly drunk at snack bars during after-parties" (company spokesperson). The product's uniqueness appealed to tourists and tapped into demand for Okinawa-exclusive souvenirs.

Furthermore, since 2019, the company has partnered with the side dish shop "Uema Okinawa Tempura Store" to sell "Okinawan-style tempura" known for its thick batter, achieving cumulative sales of approximately 15 million pieces. Since 2022, they've made a regular item of shaved ice products collaborating with "Fujiya Zenzai," a local eatery familiar to residents, selling approximately 1.69 million units. Their continuously improved "Okinawa soba" is made from scratch at partner factories, including noodle production. These products now transcend typical convenience store fare, matching specialized restaurants in taste and volume while capturing a portion of the dining-out market.

Okinawa FamilyMart has distinctive corporate structure and origins. Established in 1987 as an area franchise of FamilyMart, with 51% investment from the Ryubo Group, a major Okinawan distributor. The 77-year-old Ryubo operates department stores and supermarkets under its holdings, managing three distribution formats within one company with total sales of ¥113.8 billion, making it the prefecture's third-largest unlisted local enterprise.

FamilyMart expanded its national chain by establishing joint ventures with influential local companies in each region—the complete opposite of Seven & i Holdings' consistent expansion under direct headquarters control. However, as competitive environments changed and partner local companies' performance deteriorated in some regions, FamilyMart has periodically bought back shares and transferred operations to headquarters control. Area franchise formats now remain only in two regions: Okinawa with "Ryubo" and southern Kyushu (Kagoshima and Miyazaki) with "Honbo Shoten."

Itokazu joined in 1988, the year after FamilyMart entered Okinawa. Initially, they aimed for the same product lineup as nationwide stores with a strategy that avoided regional characteristics, but daily sales per store remained sluggish.

"When I joined, we had accumulated losses of hundreds of millions of yen and were in terrible shape. The machiyagwaa (traditional Okinawan small neighborhood shops)—were strong, and we weren't recognized. Convenience stores were expanding rapidly in Tokyo at the time, so they probably thought bringing Tokyo's scent to Okinawa would work, but it wasn't easily accepted."

Itokazu had a special formative experience that gave him early exposure to convenience stores' potential in Tokyo.

Born in 1959 in Okinawa under U.S. military administration, Itokazu moved from Naha to Tokyo in sixth grade due to his father's job transfer. This was one year before Okinawa's reversion to Japan, traveling with a passport issued by the Ryukyu Government.

While many residents lived in poverty after the war, Itokazu's father worked for an insurance company established with U.S. military capital, and his mother worked for "American Express," a bank serving the U.S. military. Family photo albums show his parents with American supervisors and colleagues at Christmas parties and home gatherings. Their daily life involved using dollars and enjoying the American lifestyle that Japanese people admired—large steaks, ice cream, and chocolate. Compared to this, he was genuinely surprised by Tokyo residents' modest lifestyle and seeing imported canned goods and sweets sold as luxury items in department stores.

"I had a kind of superiority complex that Okinawa was overwhelmingly more advanced, and I was the center of attention in class, seen as coming from a distant foreign land. Keeping up with the high academic standards was tough, but I studied intensively because I didn't want to be looked down upon for being from Okinawa. Having that harsh environment with cultural gaps added during adolescence was really beneficial," he reflects.

During his student years, Itokazu witnessed Seven-Eleven opening stores throughout Tokyo and rapidly expanding its network.

"Local shops generally closed by 8 PM. Seven opening stores from 7 AM to 11 PM was shocking. Within just a few years, intense competition led to 24-hour operations. There was tremendous demand for nighttime shopping."

After graduating from Waseda University, Itokazu returned to Okinawa and joined a bank handling foreign exchange. He was "amazed and excited to see machiyagwaa grandmothers routinely handling traveler's checks and LC openings (trade account openings requiring letters of credit for personal imports)." However, a senior colleague told him, "If you're going to quit, do it by your third year. By the fourth year, you'll understand how good the benefits are and lose the guts to leave," prompting him to decide on resignation after three years.

He set out traveling and was captivated by the Philippines, where he settled, married, and had children. The unique atmosphere mixing vitality and chaos reminded him of Okinawa under U.S. military rule, making it "comfortable" for him. He started businesses locally and occasionally returned to Japan for "migrant work," achieving top sales performance in educational materials door-to-door sales, spending his twenties following his instincts.

Having relatives who had migrated from Okinawa to Brazil and the United States before the war, he didn't feel separated by the ocean. Frequently traveling between Tokyo where he spent his student years and Okinawa, which was developing dramatically after reversion, he developed skills for building flat human relationships with a global perspective.

Itokazu returned home seeking temporary steady employment and joined Okinawa FamilyMart through an introduction at age 29. He had already been using Seven-Eleven in the Philippines as it expanded its store network there. From his firsthand experience of foreigners confidently purchasing local prepared foods with "expiration date stickers"—still rare at the time—he was convinced that "convenience stores would definitely become an interesting business format."

"I planned to work for three years, then go to Thailand or somewhere to start my own business," Itokazu recalls, but the company achieved the growth he expected, and he became fascinated by its potential. His natural curiosity was stimulated by work that took him around Japan and abroad as FamilyMart expanded, and he threw himself into materializing ideas.

Lawson entered Okinawa in 1997, partnering with San-A, the prefecture's largest supermarket chain, to establish "Lawson Okinawa" and transition to area franchise in 2007. That same year, Itokazu was appointed president and CEO of FamilyMart USA at the request of FamilyMart headquarters to reform the struggling American operation. For three years, he managed store development and product development based in California.

"I started exploring what consumers might want rather than thinking about their needs within existing frameworks. And my decision-making speed changed dramatically. If I thought something was about 50% viable, I'd do it immediately. I started thinking while running, and this happened after experiencing America."

Particularly, interactions with staff of diverse races and ways of thinking completely transformed his approach to work. "Saying what you want to say, while conducting fair salary negotiations based on performance"—he savored the essence of driving business based on flat communication.

"The way Americans approached discussions, judgment criteria, and taking responsibility matched my style perfectly, and I felt no stress at all. I realized this was half my personality and half because I was operating in an Okinawan style. My thinking became very flexible, and my self-awareness was updated."

Furthermore, "Local Uchinanchu (Okinawan immigrants and their descendants)—who recognized the Okinawan surname Itokazu frequently visited me. I was encouraged to see Okinawans living robustly wherever I went." After returning to Japan and rejoining Okinawa FamilyMart, Itokazu repeatedly told his employees: